10 Ways to Save on Accounting and Tax Preparation Fees

8/21/2015
Writtin by: Paul Bogdanoff, CPA and Tim Dages, CPA

Many clients ask how they can save on accounting and tax preparation fees. Because most Certified Public Accounts and Tax Professionals sell their time, the simple answer to that question is to help them reduce their time. One way you can do so is by maintaining and providing organized records.

Here are few tips that we share with our client’s at Bogdanoff Dages and Co., P. C. to help you organize your tax and accounting records:

Bogdanoff Dages and Co., P. C. offers client portals, organizers and has a QuickBooks Pro Advisor on staff to assist the firm’s clients with organizing their tax records and business documents. Call us if you would like to discuss how these items may benefit you or your business.

For individual returns, use the organizing tool that your tax preparer has provided. If one has not been provided, ask for one. The organizing tool will include a summary of your prior year’s return, which should assist you in gathering all of your current year’s tax documents. Also, be sure to arrange the tax documents as they are listed in the organizing tool and note any changes with your job, bank and investment accounts, dependents and any other events that occurred in your life during the current year. Your goal should be to provide your tax preparer with the information needed to prepare your return without any questions or follow up.

Provide all of your tax documents at one time, instead of sending documents in a piecemeal fashion.

Review your investment cost basis. Often, for investments sold during the current year, the investment company will provide you with a year end Form 1099 that includes the investments cost basis (i. e. the value of the investments when purchased). However, that is not always the case. Therefore, you will want to provide your tax preparer with the investment cost basis for any investments sold that year. This step is especially important if the brokerage firm has changed at any time since the investments were owned.

Determining the fair market value of donated items. If you donated more than $500 in non cash donations to a non profit organizations throughout the current year be sure to provide your tax preparer with a detailed list of the items donated along with the corresponding fair market value for those items. For your reference, both the Salvation Army and Goodwill websites provide a comprehensive list of the fair market value for donated items.

Keep Accounting Records Clean. When using QuickBooks or other software to track business accounting activities, confirm there are not any transactions that affect the prior year’s retained earnings. There are three main causes will unexpectedly change the beginning retained earning’s balance. The first two are either voiding or deleting a transaction from the prior period. The third, is something that happens frequently at the beginning of the year and that is the inadvertent dating of a current year transaction in the prior year.

For businesses provide balance sheet accounts that are reconciled at year end. Otherwise additional time may be required by your accountant to review balance sheet accounts and resolve any discrepancies.

Categorize business income and expenses correctly and consistently. Most accountants will compare the current year’s income statement accounts with those from the prior year. Additional time may be incurred to investigate any unaccounted for differences between them.

Keep in touch with your accountant throughout the year. Periodically update your accountant regarding any changes with your business or individual tax matters. In fact, biannual or annual tax planning meetings are recommended.

Call or email your accountant with questions (even the simple ones). A short phone call or email in advance can save your accountant significant time at year end when, for example, trying to classify or clarify a transaction that occurred months earlier.

Go Digital. Sending your tax records and business documents, to your accountant through your online client portals can help prevent the accounting firm from spending time that would otherwise be required to organize and store those records.

Bogdanoff Dages and Co., P. C. offers client portals, organizers and has a QuickBooks Pro Advisor on staff to assist the firm’s clients with organizing their tax records and business documents. Call us if you would like to discuss how these items may benefit you or your business.